America's weak economy shows
further deterioration. According to former Fed Governor Kevin Warsh,
"(t)he fiscal cliff in early 2013 - when the government stimulus spending
and tax relief are set to fall - is not misfortune. It is the inevitable
result of policies that kick the can down the road."
In other words, chickens inevitably come home to roost. Reckless money
printing, free lunch handouts to corporate favorites and rich elites,
and other policies favoring super-rich Americans won't last forever.
When the music stops, watch out.
The latest jobs report perhaps warns what's coming. Characterized by
some as bad Friday, it was much worse than reported. It suggests trouble
ahead, perhaps by late spring or summer.
The Labor Department reported 120,000 new jobs. Its web site says "The
confidence level for the monthly change in total employment is on the
order of plus or minus 430,000 jobs."
BLS so manipulates data, place no confidence whatever in its reports.
In good times, employment growth may be understated. During Main Street
Depression conditions, it's mirror opposite.
Moreover, the so-called "birth-death model" distorts reality. It reflects
estimated net non-reported jobs from new businesses minus losses from
others no longer operating.
During expansions, it works because start-ups exceed shut-downs. During
economic weakness, it fails. Yet BLS assumes employees from non-operating
companies still work. In addition, around 48,000 monthly jobs are added
whether or not new companies exist. Removing them drops Friday's number
close to 70,000, but it's worse than that.
Weakness showed up across the board. Over 160,000 stopped looking for
work. Around 90% of the fastest growing job areas are low-pay service
ones. Most are part-time or temp. High-pay full-time jobs are becoming
an endangered species. Economies can't grow and prosper that way.
America's been declining for years. It's heading for third world status,
and planned domestic spending budget cuts promise worse times ahead.
Bipartisan complicity assures it. Most reductions take effect post-election
and continue incrementally for years. Others not yet enacted will
America's social safety net's on the chopping block for elimination.
It includes Medicare, Medicaid and Social Security, as well as other
vital supports like food stamps.
The April 6 jobs report was revealing. Employment and participation
rates dipped. The work week declined. So did the aggregate number of
hours worked. It's a proxy for output. It fell for the first time in
Moreover, fewer hours and tepid wage gains caused a 0.1% drop in weekly
earnings at a time gasoline prices are rising and household incomes
are squeezed. Reduced consumption follows. Retailers anticipate the
crunch. They cut 33,800 jobs after 28,600 the prior month.
Hiring intentions are down. Year-over-year, they collapsed 8.8%. The
diffusion index fell. Weak data suggest sluggishness and decline. For
three consecutive months, the ISM/inventories ratio fell.
Household survey employment dropped for the first time since last June.
On a population/payroll adjusted basis, it suggests nearly 420,000 March
job losses, the most since December 2009. It paints a much different
Moreover, favorable March weather skewed numbers higher than expected.
Had normal conditions existed, a weak report would have been much worse.
Later spring and summer data will reflect it. Expect cold shower reality
to show economic trouble.
Least advantaged households are hardest hit. So are youths. March U-3
unemployment for Whites aged 16 - 19 is 22.5%. For same aged Latinos,
it's 30.5%, and for Blacks it's 40.5%. In some major cities, it tops
50%. At issue is how long will people put up with what no one should
tolerate. Eventually they'll react, perhaps violently.
Earlier, Progressive Radio News Hour regular Jack Rasmus warned that
BLS data showed "a massive mismatch" compared to "statistically adjusted"
Last winter, the difference between raw and actual data was extraordinary.
For example, the December 2011/January 2012 period reported 243,000
net January job gains. However, raw data revealed 2.7 million lost.
It was an unprecedented disparity.
Something's rotten somewhere, but scoundrel media don't explain. Neither
does BLS. For the past three years, Rasmus says its reported winter
data was "grossly overstated." Late spring/summer washes them out. He
expects a similar pattern this year.
BLS uses "grossly inaccurate" manipulated assumptions and methodology.
In other words, garbage in, garbage out. Headline monthly job totals
are "seriously deficient."
Economic weakness is masked. At best, job growth is stagnant. Household
income's too weak to sustain consumption. For America's bottom 80%,
real income growth declined annually since 2009. It's also heavily impacted
by rising energy, food, medical, transportation, and other important
Since 2009, job growth's been stagnant. Around 25 million are unemployed.
Millions more are underemployed. Most jobs created are low wage, low
or no benefit, part-time or temp service ones. America's manufacturing
base exists offshore.
We "bouncing along the bottom in terms of jobs and economic recovery,"
says Rasmus. Crisis conditions continue. Expect worse ahead. Despite
over $12 trillion in fiscal/monetary stimulus, so-called "recovery"
It's because benefits went largely to corporations and America's 1%
in bailouts, other handouts, tax breaks, and other benefits, while austerity
harms most others.
Job growth is dead. So is America's economy. Companies hoard cash. They're
not investing. They're speculating and consolidating larger. Ordinary
people are harmed most. Millions haven't enough to get by. Millions
more can't find work.
Housing in America is in crisis. Prices keep declining. Foreclosures
continue. Without sustained job growth and a healthy housing sector,
recovery and prosperity are impossible. As long as policy focuses on
tax cuts for the rich, corporate handouts, deregulation followed by
more of it, and austerity when stimulus for America's 99% is needed,
Main Street Depression conditions will continue.
Rasmus calls it an "epic recession." His new book explains further.
Titled, "Obama's Economy: Recovery for the Few," it says bad policies
yield dismal results, including growing poverty, high unemployment,
and a nation mired in trouble.
While trillions go for militarism and wars, trillions more for Wall
Street, other corporate favorites, and America's super-rich, most households
are on their own, out of luck.
Post-election, expect more of the same. Unless public anger reacts,
the worst is yet to come.
Stephen Lendman lives in Chicago and can be reached at email@example.com.
Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge
discussions with distinguished guests on the Progressive Radio News
Hour on the Progressive Radio Network Thursdays at 10AM US Central time
and Saturdays and Sundays at noon. All programs are archived for easy